And I agree that your issue with dodging bad reputations is a valid concern, which is why I think past names should be possible to check in one way or another, at least for a certain period of time. If you can check if a player used to be someone you hated, I don't really see any reason why he or she shouldn't be allowed to change his name to whatever he wanted.

People change. What they might have thought was a really awesome name when they were 16 might sound really retarded 2-3 years later. While you might think character names should stay with the character forever because of for example role playing reasons, or because it is your identity in the game, other people might not have that sort of an attachment to their character at all. For some people, their ingame character is just a heap of polygons and textures that serves no purpose other than to let you interact with the world. With the amount of time that many players put into a game such as a MMO, I think it is unreasonable to tell people to make a new character just because they want to change their name from "Sausage Bag" to "Arnwolf Skurfe".

In an offline game, a playthrough generally takes less than 80 hours. Restarting and giving the character a different name there is trivial. In an MMO, restarting and getting to the same level and gear you had before could take months even if you played several hours every single day.